Governance Risk Indicators (GRId)
. The accreditation program had been in place since the days of Institutional Shareholder Services, which eventually merged with RiskMetrics.
While I was not able to speak with someone on the record in my initial post
, I did listen to a detailed Feb. 25 Webcast interview
by Corporate Board Member’s TK Kerstetter with Pat McGurn, special counsel to RiskMetrics. He explained the reasoning behind leaving director education out of GRId.
“GRId is closely tied to the [RiskMetrics] voting policy of a company,” McGurn said. “Director education is not part of that when we look at the reelection of a director of a board.” However, he did hold out hope that in the future it could become a component in the GRId, if it reenters the realm of RiskMetrics’ voting policy.
McGurn reiterated what RiskMetrics said in a statement earlier this year about the decision to drop the accreditation program, although he did admit it wasn’t an easy one.
“The accreditation issue was a tougher one for us [than dropping director education from GRId],” he said. “Back in 2002, people laughed at us when we said we were going to include in the [CGQ] rating that directors were going to get continuing education. Fast forward to today, and these programs are ubiquitous. They are everywhere.”
When the director education accreditation program started, RiskMetrics looked at the length of time of a program (preferably eight hours), the quality of the faculty (they should be board members), and course material. “We wanted academic institutions and not-for-profits to get into the business,” McGurn said. “And then we wanted market forces to take over. Now we have determined it has been ‘mission accomplished’ [when it comes to director education programs].”
Kerstetter promises a second part to the interview with McGurn later this week. And it appears the fate of RiskMetrics itself should be on the table. That’s because RiskMetrics announced it has been sold to MSCI Inc., a global provider of investment decision support tools. Under the terms of the merger, MSCI will purchase RiskMetrics for $1.55 billion in a cash and stock transaction. [See story here
As I write this, we are in now officially in a post-accreditation era for director education. While it may not feel that much different than the past nine years, it means that organizations like The Conference Board Governance Center, The Director Network and the National Association of Corporate Directors are suddenly more accountable for the programs they provide.
Of course, this is all the result of RiskMetrics Group discontinuing its director education accreditation program as of March 1. In the end, it was a business decision for the financial research, risk management and governance service provider as it replaced its longtime Corporate Governance Quotient (CGQ) with